Redenomination for Economic Recency

Redenomination is the government’s measures to address contemporary challenges of an increasingly competitive economy

Indonesia will make a new history in terms of the monetary world. Government plan to redenominate rupiah in the next few years greeted positively among banks and the economy. Redenomination plan will eliminate three zeros in the rupiah currency. So in the future Rp 1000, – will be converted into $ 1, -. By changing the nominal rupiah, rupiah increasingly looks sexy and effective. As for keeping the rounding is not too large, the government will publish cents instead of Rp 1000, – down.

Redenomination is a process of simplification of the currency becomes smaller but does not alter its exchange rate. You do this by reducing the digits in the currency of a country becomes less. Viewed from the psychological effects, redenomination also have a positive effect. People are much more efficient with the money anywhere to buy goods. In addition, when compared with a world currency, the rupiah as the currency redenominated waste if it is not. This is because the exchange rate of our currency compared to currencies of other countries have a much nominal gap. Other countries who do not know the working process will consider Indonesia rupiah as a failed state like Zimbabwe economy. Though dollars circulating in the community of at least Rp 50, – or USD 100, – and the values ​​below it is rare. In other words redenomination rupiah able to raise the dignity of the country in the eyes of other countries in terms of psychological effects.

In a global economy, redenomination dollars is a way to answer the new challenges of the international economy. With redenomination rupiah, Indonesia proclaimed as if contemporary economic growth. This is because the terms redenomination to do when the economy experienced a positive trend. Besides the inflation rate is also controlled. While redenomination can fail to do when the economy is stagnant. With the state as such, if the rupiah redenomiasi successful, the public will regard the international economy Indonesian economy experienced a positive trend and further indicates that growth could be a new investment targets.

In contrast to the cutting process sanering currency values ​​so that people’s purchasing power decreases. Sanering aims to reduce the money supply due to rising commodity prices. This condition usually occurs at the time of hyperinflation (inflation is very high and uncontrolled) and when the macro economy is not healthy. In addition the process abruptly without going through the transition process. Redenomination while maintaining people’s purchasing power because the purchasing power remains the same. In this case clearly different redenomination sanering so there is no resulting harm, the country’s economic equality is preparing a regional level.

But the spirit of contemporary economic improvement for the sake of it must be balanced with caution given the attitude of the people of Indonesia are still not familiar with the concept redenomination. Emphasis socialization to people throughout Indonesia should be done carefully.Based on data from Bank Indonesia and the plan, it takes 50-10 years since the Act was passed redenomination with predictions about the details of the following stages:

Year 2011 – 2012: Socialization
Year 2013 – 2015: Transition Process
Year 2016 – 2018: Withdrawal of old money
Year 2019 – 2022: Elimination of the term new money

Related to the socialization process and transition, the government should be more careful and vigilant. In areas that are still not quite affordable media and complete socialization, there is an opportunity for speculators to scare people. For example in an area many who do not understand the meaning redenomination dollars. If there is someone that affect their communities redenomination result of new money or old money falls in value does not sell, then people tend to fear. While the opportunity was utilized to exchange the old money of Rp 5,000, – with the new money $ 4, -. So the local people who are disadvantaged, while those who take advantage of a profit from the multiples.

Redenomination is a positive attitude of the government managing the economy in the monetary field while preparing fiscal policy to spur economic growth. Redenomination is the government’s measures to address contemporary challenges of an increasingly competitive economy.Redenomination is not an end but an ongoing tiered process for the glory of the national economy.

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